In a rush to get a qualified retirement plan installed before the deadline for the year, the owner of Baxter Concrete failed to get a determination letter from the IRS. Five years later, Baxter is audited. If the IRS finds a disqualifying provision or if an essential provision is missing from Baxter’s plan,
Read DetailsHomer Tanner, a foreman at Wellville Steel, pays the premium for a long-term disability policy that has a three-month waiting period and replaces 70% of pay. Homer suffered brain damage in an auto accident. Full recovery took nine months. Six months after the accident, Homer was able to return to work on a part-time basis. Still very unsteady on his feet, Homer oversaw just one section of the production line while in a wheelchair. Homer’s long-term disability payments ceased when he went back to work. Which of the following is true?(I)Homer’s long-term disability payments were taxed as ordinary income(II)Homer’s long-term disability payments were tax-free(III)the definition of disability in his long-term disability policy was “own occupation”(IV)the definition of disability in his long-term disability policy was “qualified for”(V)the definition of disability in his long-term disability policy was “total and permanent”
Read DetailsTod Gristham, owner of Gristham Enterprises, wants to implement one retirement plan that will reduce turnover to about 2% a year, favor key employees, help forestall unionizing among his rank-and-file workers, and hold costs down to between 1% and 2% of company net profit. When you meet with Tod, which step of the employee benefit planning process is most important to cover with him?
Read Details